CIMA Exam Tips – November 2008

CIMA exam tips

Exam tips for the November 2008 sitting.

PERFORMANCE EVALUATION
*Variance analysis – calculations and interpretation (including mix/yield and planning/operational).
*Budgeting – different types and their behavioural impacts.
*Transfer pricing – particularly the impacts on divisional performance.
*Activity based costing – possibly compared with absorption costing.
*Performance evaluation in the modern environment (TA ratios, balanced scorecard v JIT/TQM).

DECISION MANGEMENT
*The modern business environment has proved to be popular with discursive questions on stock, quality and value along with asset replacement, learning curves and optimal pricing.
*Other areas that could be tested discursively include processes for long-term decisions in particular post completion audit, Pareto analysis and Kaizen costing.
*NPV with sensitivity.
*The conflict between NPV and IRR.
*Risk and uncertainty.
*Relevant costs.
*ABC (possibly with Pareto).

RISK & CONTROL
STRATEGY
*Identification of risk and evaluation of controls to manage these.
*Improvement to controls currently in place.
*Risk management and management control systems.
*Budgeting or investment appraisal processes.
*The internal audit process and any supporting work to review controls.
*Costs and benefits of a particular internal control system, including management accounting control systems.
*Essential features of internal control systems for identifying, assessing and managing risks.
*Information strategies – systems, technology and management and the risks and controls inherent in this process.
*The role of the Treasury function and how it aims to manage financial risk especially in the wake of current events.
*Currency risk management surrounding forwards and/or money market hedges (discursive as well as numerical).
*Organisational structures.
*Ethics and fraud.
*Governance (think Turnbull).

ORGANISATIONAL MANAGEMENT
& INFORMATION SYSTEMS
*Marketing and segmentation.
*IT systems and change management.
*Reward and motivation.
*Ethics runs through everything.

INTEGRATED MANAGEMENT
*Managing conflict.
*Stages of project management.
*Critical path analysis.
*Control issues.
*Organisational goals and stakeholders.
*Management skills and their importance in an organisational context.
*Project management, possibly with a focus on the benefits of using tools such as software and appropriate techniques.
*Approaches to organisational structure.

BUSINESS STRATEGY
*Ratio analysis requirement in section A (see May 2006).
*Application of IT in section B.
*Marketing in section B.
*Internal analysis, maybe models such as The Value Chain and 9Ms.
*Porter’s Diamond model in section B.

FINANCIAL ACCOUNTING & TAX PRINCIPLES
*Presentation of published financial statements preparation of an income statement and balance sheet.
*Indirect taxes – calculation of sales tax.
*Accounting for non-current assets – impairment losses.
*Reporting financial performance – revenue recognition criteria.
*Cash flow forecasts – the preparation of a monthly cash budget.

FINANCIAL ANALYSIS
*Written question, for example on human resource or environmental accounting or US GAAP versus IFRS and the convergence project.
*Short consolidated income statement, balance sheet or statement of changes in equity calculation.
*Recognition, measurement and/or classification of financial instruments.
*Inflation accounting/asset valuation explanation/comparison.
*Revenue recognition and/or substance over form scenarios.
*Ratio calculation and interpretation.
*Pensions accounting.
*Earnings per share.
*One question is likely to be on group financial statements e.g. complex group or foreign subsidiary balance sheet and/or income statement.
*The other two questions are likely to have an interpretation angle, one including ratio calculations, perhaps with EPS calculation or analysis, segment analysis, or the effect on ratios of changes in accounting treatment. May include limitations of interpretation of given data.

FINANCIAL STRATEGY
*Overseas investment appraisal.
*Sources of finance – a common type of question presents a scenario, for example a company needs to raise finance to fund an investment and/is considering a rights issue, or eurobonds, or £ debt.
*Investment decisions – NPV analysis is often tested with an emphasis on risk and real options.
*Formulation of financial strategy.
*Business valuations – questions often ask you to value an acquisition using a variety of techniques and to comment on whether an acquisition is likely to be beneficial to shareholders.

Warning! Use these tips in conjunction with a full programme of revision!